Shares have plummeted by 20% at Hugo Boss, the biggest fall since October 2008, after the luxury retailer warned that its revenue will drop by at least 10% this year.
The German-based brand is expectant of a “low double-digit” decline in its 2016 results due to depreciating sales in the US and China. Its recent fall has left the company’s share price at €55.55.
While Analysts polled by Bloomberg expected just a 1% decline in the period, Hugo Boss is also likely to miss its goal of an adjusted operating margin of 25%.
Hugo Boss has also joined other luxury brands in cutting its prices in response to the suffering Chinese retail climate.
In addition to a sluggish Chinese demand, Boss blames its recent hardships on the distribution of its products at US retailers who have been offering “highly promotional” levels of discounting. Its recent results may act as a warning to other luxury retailers who are partaking in or considering slashing their prices.
The brand’s revision of its expectations is the second in six months, following cuts to its earnings in October.
Hugo Boss will announce its full year financial results on 10 March.